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Prevention First 2018

“The Impact of Digital Technology on Oil and Gas Operations and HSE Performance”

25 September 2018

Dr. Donald L. Paul

Executive Director, USC Energy Institute

Professor of Engineering and

William M. Keck Chair of Energy Resources

Topics

• “Digital Transformation”

• Drivers for the oil and gas industry

• Unique dimensions of the CA oil and gas system

• Opportunities and challenges

• Summary comments

“Digital Transformation” – what is it?

• Digitization – increasing digital intensity and connectivity

• Re-engineering work flows and work processes

• Transforming decision making

Asset Monitoring & Control GatewayHigh Performance Computing Edge Server

Asset ControlHigh Performance Computing Edge Server

4

Digitizing the oil and gas industry

Exploration Drilling & Development Production

Asset Monitoring & Control Gateway

Transportation

Process ControlGateway & Fog Server

Refining

Asset Monitoring &Control Gateway

Distribution

Digitization creates “Mirror Worlds”

5

Physical World Digital World

Digital Transformation is about the intersection,

integrated operation, and co-evolution of these two

mirror worlds

Oil prices from 1977 to 2017

- 2018

Oil prices from 1977 to 2017

- 2018

“Digital

Oilfield”

“Digital

Transformation”

Industry framework

Business focus• “Rediscovering” cost

management • Increasing asset and capital

efficiency• Implementing the “oilfield as

a factory” paradigm• Re-engineering the

workforce• Lowering environmental and

social impacts

Industry framework

Business focus

• “Rediscovering” cost management

• Increasing asset and capital efficiency

• Implementing the “oilfield as a factory” paradigm

• Re-engineering the workforce

• Lowering environmental and social impacts

Technology focus

• Big Data and analytics

• IIoT for oil and gas:

– Vast expansion in sensing, digitization, and connectivity

– Next-generation automation and control systems

– Machine intelligence

– Drones and robotics

• Cyber-physical security

• Human–machine relationships

Industry framework

Business focus• “Rediscovering” cost

management • Increasing asset and capital

efficiency• Implementing the “oilfield as

a factory” paradigm• Re-engineering the

workforce• Lowering environmental and

social impacts

“Digital Transformation”

Is at the intersection

Technology focus

• Big Data and analytics

• IIoT for oil and gas:

– Vast expansion in sensing, digitization, and connectivity

– Next-generation automation and control systems

– Machine intelligence

– Drones and robotics

• Cyber-physical security

• Human–machine relationships

Unique dimensions of the CA oil and gas system

• CA is an oil supply “island”

• CA is a major natural gas importer

California is an “oil supply island”

California is an “oil supply island”

CA Fuel Demand: >1.6 million barrels/day

CA Crude Production: <600,000 barrels/day

California is an “oil supply island”

At 1 MM B/D, CA is a global-scale importer of oil

…..virtually all of which is shipped in by tanker

CA Fuel Demand: >1.6 million barrels/day

CA Crude Production: <600,000 barrels/day

CA has good pipeline connectivity for natural gas supply

CA has good pipeline connectivity for natural gas supply

CA imports 90% of its natural gas supply; less than 50% is used for electric power generation

Unique dimensions of the CA oil and gas system

• CA is an oil supply “island”

• CA is a major natural gas importer

• High-density urban oil and gas operations

• Large and numerous legacy oil and gas infrastructures

• Extensive refining and distribution system built around oil import tanker facilities

• CA-specific environmental regulations and operating requirements

• CA societal expectations

Long Beach oil production islands

Ref. Dr. Donald Clarke / AAPG

Kern River oil field

SPE 190134-MS Securing California Gas Supplies Ershaghi, Paul, Kaba

Digital transformation opportunities

• Optimizing recovery from our existing oil and gas assets

• Ensuring the integrity of the oil and fuel supply and distribution infrastructure

• Continuing to advance the performance of our refining system

• Managing the well and facilities abandonment process

• Increasing the efficiency and effectiveness of the regulatory information management process

• Leveraging CA’s global digital technology position

Digital transformation challenges

• Transformation takes resources

• Transformed organizations will require workforce changes

• Transformation takes time to scale

• The dramatic increase in digital intensity, connectivity, and complexity will likely increase cyber-security risks

Thank you

Ref. AAPG Explorer